Housing market: Foreigners buy up the countryside, rents in Budapest cheapen

In the fourth quarter of 2023, Zala County in Hungary had a substantial share of foreigners flock to its housing market. The county is not in a unique position: in three regions of the country, the proportion of non-Hungarians in the housing market has reached around 20 percent.

Foreigners are prominent in the housing market of these regions

The share of foreigners in the housing market in Zala County hit a record high in the fourth quarter of 2023, Telex.hu reports the analysis from the Hungarian National Bank (MNB). The latest data shows that 21.1 percent of home buyers in the county were foreigners at the end of last year.

Somogy County and the inner districts of Pest are also popular among foreigners. Still, interestingly, the share of foreign buyers in the housing market has declined somewhat in these two regions. Even so, almost 1 in every 5 buyers were non-locals in the case of both: 17.8 percent in the inner districts of Pest and 19.4 percent in Somogy County.

By comparison, Budapest’s proportion of foreign buyers was 7.6 percent, while in Hungary’s national housing market, it was only roughly 6 percent.

According to the Hungarian National Bank’s figures, housing prices in virtually all types of settlements saw a moderate increase at the beginning of 2024. However, the bank highlights that while foreign buyers are contributing to the rise in prices in the housing market of Hungary, they are still not the main culprit behind the hikes. Instead, speculative housing purchases are the ones that most affect prices.

Rent price increases slowed in Budapest but shot up in other cities

Rent prices have continued to rise at a higher pace than house prices, the MNB analysis highlights, but have slowed down compared to 2022.

In Budapest, for example, in the fourth quarter of 2022, the growth rate of rents was at 22.8 percent. In Q4 of 2023, on the other hand, the rate has gone down to 12.2 percent. Similarly, the national average growth in prices slowed from 21.4 percent to 12.6 percent in a year.

As for 2024, Index.hu looked at the real estate market in districts XIV and XVI of Budapest, illustrating the changes in the capital’s rental market at the beginning of the year through these two examples. It found that the hike in rental prices, which had been going on for several months, had come to a halt in the spring of 2024.